Netmarble turns a profit after years in the red, with highest quarterly earnings since IPO

• Netmarble recorded its highest earnings since its initial public offering
• The company made a net profit of ₩162 billion ($118.2 million) in Q2 2024

South Korean games maker Netmarble has recorded its first net profit in over a year with earnings at their highest since its initial public offering.

The company generated ₩782 billion ($570.4 million) in revenue during the second quarter of the year - a 29.6% rise year-on-year from ₩603 billion ($439.9 million) in Q2 2023.

This revenue rise was also observed quarter-on-quarter and signified a return to form after multiple difficult years, which appeared to be improving until another decline in Q1 to ₩585 billion ($426.8 million). That fall was attributed to a lack of new game launches, and Netmarble has now quickly steadied the ship since with a return to growth.

The winds of change

After a striking $717 million loss in 2022 and troubles continuing into 2023, Netmarble appears to have finally turned its fortunes around with its first green quarter in years. The company made a net profit of ₩162 billion ($118.2 million) this Q2, up from a ₩10 billion ($7.3 million) loss in Q1 2024 and a ₩44 billion ($32.1 million) loss in Q2 2023.

Operating profit, meanwhile, started to get back on track last year and has continued to grow this quarter, at ₩111 billion ($81 million) in Q2 2024 compared to ₩4 billion ($2.9 million) in Q1. A loss of ₩37 billion ($27 million) was recorded last Q2.

And in an all-round positive display from the company this quarter, EBITDA was also on the rise with a margin of 19.3%, up from 1.8% in Q2 2023.

Making it solo

Netmarble’s new release Solo Leveling: Arise led the charge in revenue generation this quarter as its most lucrative game of the period. The action RPG contributed 20% of the company’s earnings, more than double Marvel Contest of Champion’s 9% and nearly triple Jackpot World’s 7%.

The 2024 title generated more than $100 million in its first three months according to Sensor Tower figures.

Solo Leveling: Arise also helped push a 12% quarter-on-quarter increase in RPG revenue share in Netmarble’s catalogue, now accounting for 45% of the company’s earnings. Casual games ranked second at 34% in Q2, followed by MMORPGs at a further 15%.

Lastly, the proportion of Netmarble’s earnings in its home territory, Korea, grew by 7% quarter-on-quarter. The region represents its second-biggest market contributing 24% of consumer spending and is gradually closing the gap with its top market, North America.

While still contributing a 40% share of spending, Netmarble’s North American market saw an 8% quarter-on-quarter decline and 12% year-on-year.

Europe currently ranks third at 13%, and has remained stable in its share of spending.